Essay about Science Technology Company

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Science Technology Company 1985 President: Bill Watson CFO: Harry Finson Questions: 1. Are the 5-year forecasts useful, given uneven growth in sales, inventories and receivables, and earnings in the past? 2. What will be the impact of a resurgence of inflation, fueled by massive budget deficits, on STC? 3. Can the company finance the rapid sales growth that is anticipated? STC • Leading manufacturer of automated test equipment (ATE) • 31% market share on testers for printed circuit boards • Second largest in semiconductor test operation • Objective: To be the recognized international leader in providing integrated quality management systems to manufacturers of electronic devices and equipment. • Strategies: o Heavy…show more content…
Large customer base 2. Extensive software 3. A broad line of testers 4. A dominant share of printed circuit board test market 5. A fair position in VLSI testing 6. Two developments: a. Solved quality problems on an in-circuit tester that is expected to be a mainstay product b. A high performance new tester that will be a breakthrough in test technology by mid-1986 7. A major program with US Department of Defense Reviewing Financial Pressures • Financial base for planned growth: 3.45 million shares of common stock in 1982 and 1983 that raised $66 million • Financial strength in 1985 matched competitors’ • 2 concerns of Mr. Watson: 1. Past difficulties in forecasting 2. Very substantial increase in debt • Permanent new capital requirements depend almost entirely on: o Sales growth o Retained profits o Efficiency of corporate assets employed • Absence of cash dividends allowed STC to avoid excessive debt
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